Why Freshworks Stock Plummeted This Week

Core Viewpoint - Freshworks reported better-than-expected Q4 sales and earnings, but the stock price fell significantly due to investor dissatisfaction with forward guidance [2][4]. Company Performance - In Q4, Freshworks achieved non-GAAP earnings per share of $0.14 on sales of $222.7 million, exceeding Wall Street's expectations by $0.03 and $3.9 million respectively [4]. - The company's stock price dropped 18.8% over the past week, reflecting broader bearish trends in the software sector [1][5]. Forward Guidance - Freshworks projects Q1 sales between $222 million and $225 million, with full-year sales expected to be between $952 million and $960 million, targeting an annual revenue growth of approximately 14% [8]. Market Context - The software industry is experiencing valuation pullbacks due to concerns over growth-dependent valuation multiples and potential AI-driven disruptions, leading to increased investor caution [5][9].